Feds to mortgage banker: We want your giant bag of money

Published 10:00 pm, Sunday, August 1, 2010

Alleging a long-running fraud involving a cash-packed safe and a garbage bag stuffed with money, federal prosecutors have asked that a bank executive accused of fraudulently brokering mortgages be forced to hand over $102,000 to the government.

In the civil complaint filed late last month, federal prosecutors claim ex-bank executive Shawn Portmann has been the subject of a yearlong inter-agency investigation into his former employer, Tacoma-based Pierce Commercial Bank.

Writing the court, Assistant U.S. Attorney James Lord noted that Portmann and two others with Pierce Commercial Bank's home loans division are suspected of falsifying thousands of mortgage loan applications and, in doing so, pocketing large premium payments from lenders.

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Since June 2009, Lord argued, investigators came to believe "that Portmann and two other principals at (Pierce Commercial Bank) Home Loans had devised a scheme involving … materially false representations to induce financial institutions to fund and/or purchase loans."

Portmann was the loan officer on 5,253 loans, amounting to nearly $1 billion in lent money and about 46 percent of the home loans issued by the bank, the federal prosecutor told the court. Federal investigators contend about half of those loans were obtained through fraud.

In addition allegations that he falsified application information, Portmann is accused of drawing cashier's checks from his personal bank accounts to show that would-be loan recipients could pay their debts. The checks were printed, but the funds were quickly returned to Portmann's accounts, Lord told the court.

Federal investigators claim 85 checks totaling about $899,000 were cut from the account between 2006 and 2009, according to the July 30 court filing. For securing the loans, Portmann was paid at least $813,000 in premiums from 2006 to 2008.

Speaking with IRS and FBI agents earlier this year, Portmann's personal assistant said she withdrew about $500,000 from Portmann's savings account and deposited the cash in a safe at his home, according to the civil complaint. Another person allegedly involved in the scheme turned over a large garbage bag filled with $102,000 in cash, telling investigators that Portmann had given him a backpack in late January or early February containing $100,000 in bundled $100 bills.

"Portmann had become aware that he was the subject of an ongoing fraud investigation and consequently asked (him) to keep the United States currency at his home," Lord told the court. "Portmann told (the man) that he believed the FBI thought Portmann was a flight risk and because he had a lot of cash at home, he did not want the FBI to think he would use it to flee."

The federal prosecutor asked that a U.S. District Court judge order Portmann to forfeit the money to the federal government as the criminal investigation continues.

Portmann's attorney was not available to comment Monday.

The forfeiture request follows administrative actions against Portmann and Pierce Commercial Bank, including a June 10 order by the Federal Reserve that the bank either raise money or sell itself to another lending institution within 60 days.

According to that order, the Federal Reserve board determined in April that the bank was undercapitalized. The order barred the bank from making additional loans or raising executive pay.

At the time, state regulators said, Portmann was advertising mortgage services online while describing himself as the "senior loan officer" for the firm. The operation was shut down following the cease-and-desist order.

Portmann has until early September to respond to the federal forfeiture order request.